Airport retail is no longer – and hasn’t been for some time – a space just to buy a cheap souvenir and a Toblerone for a loved one (although that offering is still there). Airport retail has developed massively over recent years to become a shopping destination in its own right and an exclusive one at that. Across the industry, more and more luxury retailers are leasing space and having great success.
Heathrow is a great example of luxury retail, some of their tenants include; Chanel, Rolex, Cartier, Tiffany & Co, Mulberry, Gucci and Prada. Heathrow offers a personal shopping experience with their ‘VIP Black’ initiative, whereby the passenger can choose a terminal to browse with their personal shopper, to view the latest collections and ranges from their favourite brands. This initiative links well with the ongoing mission to change travelling from a ‘process’ to an enjoyable experience. VIP lounges and exclusive experiences are becoming increasingly more important to passengers and the tenant mix plays a big part in how an airport is perceived by current and future passengers.
There are numerous aspects incentivising passengers to spend on luxury items when travelling, a prominent enticement for the UK is the current weak pound, resulting in bargain prices for international travellers. The weak pound provoked a spike in tourists to the UK; the Guardian reported bookings from the US up 19% for June to August year on year and those from China up 29%.
Other contributions to increased sales are; the holiday ‘treat yourself’ mindset; marketing campaigns and the rise in wealthy passengers. According to research, Chinese travellers accounted for nearly 1/3 of all luxury purchases last year. With that statistic in mind, it is interesting to see Global Blue’s article highlighting that a popular trend amongst China’s growing population of affluent millennials is travelling. These millennials have the disposable income to spend in luxury stores whilst waiting for their flight. If this trend continues (which it appears to be), luxury retailers are expected to see an ongoing increase in sales!
As airport operations become more efficient, passengers are time-pressed, facing retailers with the challenge of losing those impulse purchases from those browsing. However, to combat this, many airports are teaming up with tenants, promoting stores and products online – some even allowing passengers to purchase and collect at the airport. However, that being said, retailers don’t seem to be overly affected by this as the average passenger spend has continually increased over the last 3 years!
The aviation retail market is growing fiercely with luxury growing prominently; all the aviation news publications I read are constantly reporting new retailers joining airports, and this is happening internationally. The increase in passenger traffic and the developments and expansions equipping airports to offer increased flight routes are giving airport tenants a much higher footfall – indicating the success is only set to continue!
Kat Whitehead, Senior Marketing Executive, Foundation Recruitment